Situation Analysis 2
Mountain Hardwear: the Brand 4
Identification of Issues 4
Alternative 1: to distribute through REI 4
Possible Short Term Issues: 4
Possible long term issues: 5
Implications for the brand: 5
Alternative 2: to not sell through REI 6
Possible issues: 6
Implications for the brand: 7
Addressing brand dilution 7
Addressing relative retailer power 8
Resources Required: 8
Time frame: 8
Performance measurement: 9
In 1993, a number of employees in Sierra Design decided to start their own outdoor apparel company. They capitalized on their expertise in the field and with the support of an …show more content…
This is referred to the “push strategy”, where the manufacturer tries to reach the consumer by pushing it through the distribution chain. (Keller, 2007) In the case of REI, the size of their business may give them relative power, forcing Mountain Hardwear to accept terms that are difficult for them. The brand will lose out one of its more powerful voices, that of an outdoor retail sales associate.
3. Exclusivity – Selective distribution of the brand gave Mountain Hardwear prestige, credibility and authenticity. By spreading that out, the brand faces the real threat of diluting themselves in the eyes of their loyal customers.
4. Loss of control –By tying up with the large retailer, Mountain Hardwear may lose control over their brand; the way it is promoted and presented in stores. A lack of synergy between manufacturer and retailer can create a mismatch in the customer’s perception of the brand.
Possible long term issues:
1. Shift in customer profile – In using a different distribution channel, Mountain Hardwear has to consider if the kind of customers they are targeting may change with time. These customers may not purchase the same high-end equipment. While sales quantities may increase, the brand itself may become a volume brand rather than a premium one. When regular customers stop connecting